Business Activity
Property development in terms of acquire build and sell is acceptable business activity as Kriel v MIAC [2008] AATA 433 (23.5.08) shows. Here is what was undertaken:
10. The applicant agreed to become a 25% share holder to the value of $250,000 in a property development company called Silver Property…
11. Silver Property employed a site manager for the Wilson development, with who the applicant was in regular telephonic and electronic contact. Silver Property appointed a building contractor, Impression Homes, to construct the 5 home units on the Wilson site.
12. The total land and development cost for the 5 Wilson units was around $1,750,000..
13. Sales of the 5 developed units were over $2,000,000.00..
As part of the above arrangement, it was agreed that two of the Wilson units would be sold to the applicant and his son, Francois, at a discounted price of $380,000.00 each. Both houses currently have tenants paying $350.00 per week.
16. In Oct 06, the applicant travelled to Perth to meet his business partners and advisors with respect to completion of both the Wilson project and for the instigation of new development projects. During the trip, the applicant inspected 2 proposed duplex sites in Aubin Grove.
17. The development of the Aubin Grove site was first discussed to be Silver Property’s next project around Aug 06 along with other potential developments. A project feasibility report on the duplex lots was prepared. The report projected a total development cost for the two duplex lots in Aubin Grove at around $2,080,000 with projected sales at $2,180,000.
18. Subsequently, in Feb 07, Silver Property purchased the Aubin Grove lots for subdivision into duplex lots for a total of $910,000..
19. Conditional approval for the Aubin Grove development was granted by the WA Planning Commission on 7.2.08.
On the basis of the above the AAT had little difficulty finding that activity was an ‘eligible business’.
But the applicant was based overseas but had extensive evidence of emails telephone calls and participation by telephone in monthly meetings. On time spent in the business the AAT found this:
72. The conclusion reached by the Tribunal in the decisions cited above is that there is no requirement in the relevant legislation for the business visa holder to spend a certain number of hours per week on their management role in the business in order to show they are involved in the day-to-day management.
Management role intangible
77. The Tribunal finds… that the applicant is an experienced businessman and has utilised his skills through managerial involvement in Silver Property. There is nothing in either the Corporations Act or the Act to suggest that in order to fulfil the day-to-day management of a company, the visa holder is required to physically liaise or represent the company in meetings with financial institutions, local government officials, engineers, architects, builders or any other third parties. Nor do visa holders have to “personally sign” contracts or agreements on the company’s behalf in order to play a part in the preparation of the contract or agreement.
78. It is evident that the terms used to describe the applicant’s management input are that of an “intangible” nature. The Tribunal finds that the applicant is successfully exercising types of involvement that are suited to the purpose of the type of business he is in, namely, property development. This form of input can be evidenced in his monitoring of decision making in the business activities via sending his advice, agreement, review, analysis or queries in business communiqué such as e-mails. In the case of Re Lau, at para 33, it was decided that this type of management involvement was sufficient “intangible input” in the company’s day-to-day management.